What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial protection to beneficiaries upon the death of the insured. This financial support ensures that dependents or loved ones are not left in a difficult financial situation if the policyholder passes away unexpectedly. Life insurance serves to cover immediate expenses such as funeral costs, outstanding debts, and ongoing living expenses, thereby offering peace of mind to both the insured and their beneficiaries.

In contrast, while life insurance may sometimes be thought of as a financial investment or a tool for retirement savings, these are not its primary functions. Life insurance is not designed specifically to cover medical expenses; rather, that role is typically fulfilled by health insurance. The focus of life insurance is fundamentally on providing support after the death of the insured rather than acting as a financial investment or retirement savings vehicle.